Landlords advised to gauge demand before investing in student property


Mon 20th Feb, 10:00:00 GMT

Building a portfolio of student properties has become one of the most popular investments in the UK in recent years, as a steady rise in the number of young people heading to university has assured the market remains buoyant. But British buyers must not be naive enough to presume that snapping up any property in any location will lead to a deluge of tenancy requests, as demand is not consistent across the country.

Peter Mindenhall, a researcher at IPINGlobal.com, has offered some hints and tips on exactly what types of homes to invest in and, perhaps more importantly, where they should be located. The demand is certainly there – Countrywide reported recently that 275,000 new tenants signed up for private rental accommodation last year – but landlords must meet students' demands to succeed.

Firstly, students want to be positioned close to their campus, so ruling out any properties that are some distance from a university base is a good first step. Mr Mindenhall also suggested that high-speed internet is becoming an increasingly important feature, so it may be that properties capable of offering this are a better investment. Other factors to consider are security and transport links, both of which are typically vital to students and will result in a home being more appealing to potential tenants. The former can be dealt with by investing in home improvements, perhaps by hiring an electrician to fit an alarm and other security solutions.

"If all of these can be provided by a student development near a university that does not have many other purpose built properties and it represents better value for money, [then] demand will be higher," Mr Mindenhall stated.

One of the most common mistakes landlords make is to invest in property based on the number of students that can be found nearby, such as in London where a vast number of young people are studying. However, if you select the wrong building and it does not offer any of the items students are looking for, you will find it tough to rent it out. The quality of the university should not make a difference either, Mr Mindenhall noted, so there is little value to be had in simply aiming to buy in Oxford or Cambridge. Looking at a less established university town with fewer student homes and a growing demand may in fact be the shrewdest option for investors to take.

There is undoubtedly plenty of scope for landlords to succeed in the student market, but in these challenging times a little thought is required.

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